RECLAIMING MOTION BY VAN OORD UK LTD AGAINST DRAGADOS UK LTD [2021] ScotCS CSIH_50 (05 October 2021)

RECLAIMING MOTION BY VAN OORD UK LTD AGAINST DRAGADOS UK LTD [2021] ScotCS CSIH_50 (05 October 2021)

Clauses 10.1 and 63.10 of NEC are counterparts; unless Dragados acted in a spirit of mutual trust and co-operation, it cannot seek a reduction in Prices. Instructions issued in breach of contract are invalid and do not entitle Dragados to reduce the bill rate. Compensation event mechanisms do not apply to breaches, and Van Oord has pled a relevant case to go to proof.

Citation
[2021] ScotCS CSIH_50
Parties
Pursuers and Reclaimers: Van Oord UK Ltd; Defenders and Respondents: Dragados UK Ltd
Jurisdiction
Scotland
Judgment Date
05 October 2021
Procedural Posture
Commercial Contract Dispute / Reclaiming Motion (appeal) From Commercial Judge
Outcome
Interlocutors of the commercial judge recalled; proof before answer allowed.
Legal Topics
Subcontract Breach, Compensation Events, Contract Interpretation, Good Faith, Valuation of Works
Construction Law Contract Law Subcontract Breach Compensation Events Contract Interpretation Good Faith Valuation of Works

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Parties

Van Oord UK Ltd

Pursuers and Reclaimers

Dragados UK Ltd

Defenders and Respondents

Procedural Posture

Commercial Contract Dispute / Reclaiming Motion (appeal) From Commercial Judge

Legal Issues

  1. 1 Whether Dragados was entitled to reduce the sums payable to Van Oord for dredging works after breach of subcontract
  2. 2 Proper construction of NEC contract provisions regarding compensation events and pricing
  3. 3 Effect of breach on bill rate and Defined Cost

Ratio Decidendi

Clauses 10.1 and 63.10 of NEC are counterparts; unless Dragados acted in a spirit of mutual trust and co-operation, it cannot seek a reduction in Prices. Instructions issued in breach of contract are invalid and do not entitle Dragados to reduce the bill rate. Compensation event mechanisms do not apply to breaches, and Van Oord has pled a relevant case to go to proof.

Court Disposition

Interlocutors of the commercial judge recalled; proof before answer allowed.

Orders

  • Van Oord's second plea in law sustained to the extent of excluding from probation averments in Answers 14, 15 and 20 stating Dragados is allowed to reduce the bill rate.